The average monthly cost of mortgage repayments in the UK have risen by 78 per cent over the past five years, an accountancy firm said today.
According to a new report from Ernst & Young, the high home loans inflation joined a 110 per cent rise in gas and electricity and a 29 per cent increase in petrol costs to eat into disposable incomes. Since 2003, the report found, the amount of gross income that could be used for non-essential spending has shrunk from 28 per cent to just 20 per cent.
Effectively, this means that Britons are feeling 15 per cent less well off than they did before, the firm claimed.
The sharp rise in mortgage costs can be partially explained by the credit crisis that has afflicted the market over recent months. The crunch has seen many lenders become much more tentative about offering credit to customers, and rates have also been raised as a consequence.
Many UK consumer segments are clearly feeling the pinch as big rises in household costs are far outstripping relatively modest wage inflation," said Jason Gordon, director of retail at Ernst & Young.
"All consumers are painfully aware of the huge hikes in petrol and utility bills but we've also seen some fairly hefty price increases in pension contributions and debt repayments."
